2016 has been hella 2016-ish for everyone's favorite basic bro Mexican chain what with selling all those diarrhea burritos, having its Chief Reputation Officer get busted buying a bunch of blow, losing a labor suit to a pregnant employee and watching its stock fall hard enough that Bill Ackman decided to grab up a few armfuls of shares.
But with the curtain finally about to close on a year that felt at times like it might have had temporal E. coli, Chipotle is facing down yet another problem:
The burrito chain, battered by disease outbreaks last year, says cleanliness in its restaurants and speed of service have suffered as a result of a new focus on food safety.
Co-Chief Executive Steve Ells says the company is now focusing with “laserlike” attention on those problems to draw customers back. Mr. Ells said he isn’t satisfied with the pace of Chipotle’s sales recovery or the quality of the restaurant experience.
“When we invite lapsed customers into restaurants that are less than perfect, they will not return as frequently,” he said during a Barclays investor conference on Tuesday.
Chipotle in October reported that same-store sales in the third quarter fell a worse-than-expected 21.9%. Profit fell 95%.
You know what sucks to read if you're CEO of a business?: "Profit fell 95%"
That shit is a bummer.
So as any person sanely facing down a major life crisis, Steve Ells is taking inventory of his life and trying to find hope. And impressively, he's even taking one of his most persistent headaches and attempting to turn it into a potential solution:
Mr. Ells also said Chipotle will soon announce a new slate of members to its board, where the average tenure is 14 years. Mr. Ells wouldn’t say whether activist investor William Ackman, whose Pershing Square Capital Management LP disclosed a 9.9% stake in Chipotle in September, will get one of those seats. He said executives and Mr. Ackman agree on what Chipotle must do to improve sales.
Okay Chipotle, now we know where you're at in your journey: You're at that point where - after casting about in the darkness for anything resembling good news - you're accepting what has happened to you and trying to make the best of a nightmare situation by letting Bill Ackman take (at least some of) the wheel.
We call this the "Valeant Complex"... and the prognosis ain't great.